Experience of Sweden with the use of nonfossil resources for heat and power generation

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1 Experience of Sweden with the use of nonfossil resources for heat and power generation Erik Larsson, Manager Energy Policy, Swedish District Heating Association

2 Vision SDHA is working to make the district heating industry an obvious, growing part of an energy future which is ecologically sound, and financially and socially sustainable

3 The green concept of district heating: recover surplus heat and other local energy resources! Industrial surplus heat Solar, geothermal Surplus heat from waste Biofuels Surplus heat from biorefineries Fossil fuels and heat pumps Combined heat and power

4 Members of the Swedish District Heating Association by owner Private/foreign 10% Government 4% 86% Municipal 135 member companies Operation more than 400 DH systems

5 District Heating in Sweden 9 million inhabitants 50 TWh district heating Almost 50 % of total heat market Present in every urban ares with more than inhabitants More than 600 DH systems Still growing Turnover 3,3 billion euro Competing on the heat market

6 District heating a key resource to combat climate change Fuel/energy used for District Heating in Sweden TWh 60,0 50,0 40,0 30,0 20,0 10,0 0,0 CO 2 CO2 kg/mwh 350,0 300,0 250,0 200,0 150,0 100,0 50,0 0,0 Others CO2(kg/M Surplut heat ind Heat pump Waste Wood Fuel Peat Electric boilers Coal Natural gas Oil

7 What policies triggered the transition to lowcarbon Swedish district heating? Political commitment to take the lead Main strategy: polluter pays principle. Energy taxes; from 1991 carbon tax. Investment subsidies to selected local projects (Klimp) Local responsibility using local energy sources and entrepreneurship

8 Delivered heat by ownership Part of sold heat 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Others Vattenfall Sydkraft / E ON Fortum Muncipality Company Municipality

9 Why? - continues increasing taxes has changed the DH 45,00 40,00 35,00 30,00 25,00 öre/kwh 20,00 15,00 Oil Coal Natural gas Elektricity Oil industry 10,00 5,00 0, Källa: Svensk Fjärrvärme Visit London

10 How? Implementation of Carbon tax example oil SEK/kbm oil Carbon tax Oil Energy tax Oil 100 /ton /ton /ton 0 Källa: Svensk Fjärrvärme Visit London

11 Expansion - heat delivered Rapidly growing number of customers result in a slowly expanding deliveries due to increased energy efficiency in buildings and district heating networks GWh/year

12 Deliveries and the total length of the DH-nets in Sweden

13 Market shares 25% 44% Other 93% 75% 56% District Heating 7% Family houses Blocks of flats Public premises Source: SCB

14 Political lessons learnt? A high price on CO2 triggers change. The Swedish CO2-tax today: 100 /ton A tax approach makes room for markets to launch competitive alternatives. Not only renewables matter. Efficient use of primary energy is equally important! Investments in infrastructure demand political commitment, local as well as national. This is the great challenge!

15 Industrial lessons learnt? Important to pursue a flexible approach, in co-operation with other public utilities and private entrepreneurs Research and development vital to promote a modern, innovative district heating sector Essential to secure strong participation from industry in the development of technical tools and rules

16 Some activities are more inefficient than others EJ Input-Output analysis for various parts of the energy system EU27 in Input: Total primary energy supply Output: Consumer end use of energy Electricity District heat Heat - Industrial sector Heat - Other sectors (buildings) Transportation Åre, July 23, Source: Sven Werner, Halmstad University

17 The Opportunity for DH - Internalization of environmental impact Energy taxes as a means of changing the use of energy from fossil fuel to renewable energy has been used. From 1991 Carbon tax in Sweden. In EU from??? DH has been successful in implementing the idea to phase out fossil fuels DH can provide cheaper energy to the customer by using cheaper energy sources, such as energy from waste, CHP, industrial surplus heat and biomass DH can turn existing building into zero emitting houses

18 Sustainable urban energy systems fulfil demands for - Security of supply - Energy efficiency - Non-fossil technologies

19 Thank you for your attention!